Oil extends push higher as US-Iran stalemate reinforces risks

Rong Wei Neo, Bloomberg News on Aug 19, 2026

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Oil rose for a fourth day, with no sign of progress toward a resolution of the U.S.-Iran war after almost six months of conflict.

Brent climbed toward $92 a barrel, while West Texas Intermediate was near $86. U.S. President Donald Trump insisted Tuesday there were no talks ongoing with Tehran, with the status of the Strait of Hormuz still contested.

Visible traffic through the waterway — which links Persian Gulf producers to global markets — remained low. On Tuesday, the U.K. said a vessel leaving the strait was hit by a projectile, causing one casualty, while on Wednesday, two Chinese-linked supertankers U-turned, according to tracking data.

Crude has roared higher since the outbreak of the conflict in the Middle East in late February, boosting inflationary pressures. The war between Russia and Ukraine has also contributed to tighter energy markets following attacks on refineries. Product prices, especially diesel, have rallied much harder than oil, heaping pressure onto drivers, truckers and farmers, as well as industry.

“The next leg in oil may be driven less by another dramatic headline and more by the market’s fear of being on the wrong side of the physical trade,” said Priyanka Sachdeva, head of market insights at Phillip Nova Pte Ltd., citing factors including constraints on flows through Hormuz.

With no talks underway, according to Trump, the U.S. plans to ramp up the economic pressure against Iran in a bid to force Tehran to capitulate, while maintaining a blockade of the nation’s ports. Treasury Secretary Scott Bessent flagged that a package of harsh new measures may be unveiled this week.

Ahead of that, the United Arab Emirates said that it would suspend all trade and financial transactions with Tehran in light of what it termed regional escalations. The UAE — which sits across the Persian Gulf from Iran — has been a frequent target of attacks, especially against shipping.

In the U.S., there were fresh signs of lower inventories. The American Petroleum Institute reported a modest draw in nationwide crude holdings, including at the hub in Cushing, Oklahoma. Stockpiles of distillates — a category that includes diesel — were also seen falling. Official data are due later Wednesday.

Global diesel markets are particularly tight, with flows from the Middle East disrupted and Moscow suspending exports. In the U.S., the margin for making the fuel from oil has topped $100 a barrel, setting all-time highs.

In Europe, gasoil rose along with crude, with futures adding 0.7% to $1,308 a ton. Most-active prices have more than doubled this year.